ACETO Corp (ACET) Misses Q4 EPS by 4c

August 26, 2016 5:58 AM EDT
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ACETO Corp (NASDAQ: ACET) reported Q4 EPS of $0.35, $0.04 worse than the analyst estimate of $0.39. Revenue for the quarter came in at $135.4 million versus the consensus estimate of $146.71 million.

Management Commentary

“For fiscal 2016, I am pleased to report that ACETO notched another record year in terms of sales and earnings. ACETO delivered double digit net income growth on a non-GAAP adjusted basis while continuing to execute on our strategy of transitioning the business toward human health. During the year we launched seven new finished dosage generic products and invested $7.9 million in product development, a 33.6% increase over fiscal 2015,” said Sal Guccione, Chief Executive Officer of ACETO.

“However, after reporting solid results for the first nine months of 2016, we posted fourth quarter declines in net sales, gross profit and earnings, reflecting intensified competition in our Rising Pharmaceutical business, an unfavorable comparison to exceptionally strong results last year that included a $9.5 million favorable sales adjustment at Rising and a $3.5 million earn-out adjustment, also at Rising,” continued Mr. Guccione. “Our Pharmaceutical Ingredients segment grew sales by 11.3% in the quarter and maintained its gross margin on continued strong sales of active pharmaceutical ingredients in international markets. Also, consistent with trends seen in the first nine months of fiscal 2016, Performance Chemicals grew gross profit modestly in the quarter on lower sales, reflecting the impact of the devaluation of the Chinese currency on the specialty chemicals business and better product mix in the agricultural protection business.”

Mr. Guccione concluded, “Regarding 2017, we are expecting to grow both sales and net income. We have robust new product launch plans for generics, and expect to launch between 12 and 15 new products, approximately twice the number of products launched during 2016. The positive impact of these launches is expected to generate volume growth and accumulate over the course of fiscal 2017. As a result, and given the current competitive environment in the generics industry, for fiscal 2017 we are expecting both sales and non-GAAP adjusted earnings per share to grow in the mid-single digit percentage range, with GAAP earnings per share growing at a somewhat slower rate. Finally, given the dynamics of our product launch schedule, we expect the second half performance to be stronger than the first half.”

For earnings history and earnings-related data on ACETO Corp (ACET) click here.

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